The story of the EB-5 project Hacienda at the River involves 30 EB-5 investors from four countries who each invested $500,000 to obtain a U.S. green card. In total, a $15 million EB-5 loan was made through Green Card Fund, the regional center operator, to the project developer, Watermark Retirement Communities.
The project just celebrated a major milestone as Watermark Retirement Communities repaid the EB-5 loan in full and before it was due.
Watermark repaid the loan after five years and did not exercise either of the one-year options.
“It is a relief to get repaid because many of the EB-5 projects out there are not as promising,” said one Chinese investor in the project. “I appreciate the efforts of the developer and Green Card Fund to complete the project.”
EB-5 attorneys explain that regional centers repaying their loans as per the project agreement helps build a positive track record for the EB-5 industry.
Marjan Kasra, founder of Lawmak law firm, says: “Adhering to deadlines articulated within the offering documents reinforces investor trust, thus incentivizing more foreign investors to entrust their capital to US developers and Regional Centers alike,” the EB-5 attorney says.
Meanwhile, Shae Armstrong, securities attorney from Bradley Law, states: “A Regional Center’s record of repaying its EB-5 investors’ principal is a credible indicator for potential investors looking to invest with a dependable Regional Center. The repayment process helps investors achieve their goals of acquiring permanent residency and timely obtaining their principal investment (and any returns) according to the deal documents.”
EB-5 project transparency is essential for enabling trust in the process
Green Card Fund allowed all sustained investors to be repaid and offered non-sustained investors a 30-day window to withdraw from the project if they decided to abandon the immigration process.
“At the end of the day, you have to do right by your investors,” Green Card Fund Co-Founder and CEO Kyle Walker said. “The investors place so much trust in our ability to manage the process that you have to do everything you can to obtain a positive outcome for each investor.
Given the unique circumstances of many of the investors in this project, we wanted to make sure that each investor had the opportunity to do what they thought was best for them and their family.”
Walker adds that Green Card Fund’s ability to repay fully by the project agreement responds to a rigorous due diligence process for evaluating projects.
Also, Watermark, the project sponsor, has a reputable track record in senior care. The company has developed more than 60 facilities in 19 states.
Watermark and its Chairman, David Freshwater, have brought a more upbeat approach to senior living after touring several “dreary” facilities with his grandmother.
Hacienda at the River, developed in conjunction with the University of Arizona at a total cost of $27,365,124.39, is meant to feel like a boutique hotel and pet-friendly facility. It features horses on the property, offers gourmet cuisine, and has individually tailored wellness programs.
“I considered the resilience of senior housing compared to the overall economy, and that EB-5 money went to refinance an existing construction loan,” project investor Edouard Biron, who now resides in Irvine, CA with his family, said. “The risk profile is paramount in all fixed-income investments. Further, the project’s tenant, Watermark, and equity sponsor Kayne Anderson were well established in their respective industries.
The facility, which offers independent living, assisted living and memory care, also earned Best Assisted Living and Best Memory Care status by US News and World Reports.
“I was always kept informed and knew how the project was progressing,” investor KM said. “It was exciting to see the project move forward and hit its goals. The facility is beautiful, and it performed well right from the start.”
Green Card Fund and its parent company NewGen Worldwide remain active in both EB-5 and commercial real estate.
RIA’s 2-year sustainment period sets time frame for payback
According to Kasra, the EB-5 Reform and Integrity Act of 2022 (RIA) requirement for the investment to be sustained for a minimum of 2-years post its deployment to the JCE (Job Creating Entity), provided job creation requirements have been met, is irrespective of visa availability or processing delays.
Before RIA, the attorney explains, Regional Centers had longer than the current mandatory two-year payback period. “An investor would have had to sustain investment for 2-years after having gained conditional permanent residency, effectively extending the time the RC had access to more than five years (3+ years for visa processing plus the 2-year post-residency).
The extended timeframe permitted Regional Centers to retain investor funds for an undetermined, elongated period, awaiting USCIS petition processing and visa availability. This was especially burdensome for Chinese and Indian investors due to visa backlogs.
The recent lawsuit by Invest in the USA (IIUSA) against the USCIS seeking to extend the two years to five years has again put this period in the spotlight, Kasra concludes.
DISCLAIMER: The views expressed in this article are solely the views of the author and do not necessarily represent the views of the publisher, its employees. or its affiliates. The information found on this website is intended to be general information; it is not legal or financial advice. Specific legal or financial advice can only be given by a licensed professional with full knowledge of all the facts and circumstances of your particular situation. You should seek consultation with legal, immigration, and financial experts prior to participating in the EB-5 program Posting a question on this website does not create an attorney-client relationship. All questions you post will be available to the public; do not include confidential information in your question.
